Skip to content 
Case Summary
- Dispute Type: Cross-Border Trade & Contract Dispute
- Forum: Shenzhen Court of International Arbitration (SCIA)
- Amount in Dispute: Over $230,000 USD in Outstanding Principal + Contractual Penalties
- The Outcome: The Arbitration Tribunal affirmed the breach of contract, sustaining the Claimant's primary claims and granting recovery of the costs incurred in realizing the debt.
Case Background & Context
The Claimant, a Hong Kong-based limited company, executed a Cooperation Confirmation with the Respondent regarding outstanding trade payments. In this agreement, the Respondent formally acknowledged a debt exceeding $230,000 USD and committed to a lump-sum clearance by the end of that month. The contract explicitly stipulated a daily late payment penalty of 5‰ and mandated that the Respondent bear all expenses incurred by the Claimant in realizing the debt.
Following a default on the agreed repayment schedule, our firm was retained by the Claimant to file an arbitration claim before the Shenzhen Court of International Arbitration (SCIA) to recover the principal debt, accrued penalties, attorney fees, asset preservation fees, and guarantee costs.
Our Core Strategy: Rigorous Burden of Proof & Cost Allocation Advocacy
To safeguard the client's financial interests and ensure contractually mandated indemnification, our litigation team executed a precise, evidence-based advocacy strategy during the proceedings:
- Enforcing Standards on the Burden of Proof: While the Respondent submitted written statements alleging partial payments and arguing for shared commercial risks, they failed to present supporting evidence or attend the hearing. Our team successfully requested the tribunal to proceed in absentia, establishing that unsubstantiated defenses do not alter formal contractual liabilities.
- Securing Contractual Dispute Costs: We presented a detailed account of all ancillary expenses, demonstrating that attorney fees, asset preservation fees, and litigation guarantee fees were necessary, reasonable, and contractually mandated costs arising directly from the breach.
- Balancing Contractual Remedies: We advocated for the recognition of capital occupation losses under the contractual penalty clause. This assisted the tribunal in protecting the creditor's rights while ensuring the final adjusted penalty conformed to equitable principles.
The Award & Outcome
The SCIA Arbitration Tribunal adopted the factual basis of our claims and delivered its award in favor of the Claimant:
- Principal Debt Affirmed: The Respondent was ordered to pay the outstanding trade debt of over $230,000 USD, along with late payment penalties adjusted reasonably by the tribunal for fairness.
- Dispute Expenses Granted: The tribunal held that attorney fees, preservation fees, and guarantee fees constituted necessary expenses for realizing the debt, granting full support to the Claimant's claims for these costs.
Why Clients Trust Neo-Ark Law Firm: In cross-border commerce, ensuring that the counterparty covers the costs of legal enforcement is vital for true commercial relief. By successfully recovering the primary debt alongside the associated legal and tactical expenses, our firm protected our client's commercial position, demonstrating our capacity to manage cross-border commercial arbitrations with procedural efficiency.
